Today’s buyers are now seeing both manufactured and modular homes as an affordable but stylish alternative to conventional stick built homes. Developers are considering them more in their subdivision planning and financial institutions are making it easier to provide financing for them. Changes in how the land and dwelling is purchased in a package deal and how most lenders are treating the financing the same as conventional real estate financing gives buyers more options when purchasing a home.
In addition to the new stylish looks and amenities offered in today’s manufactured and modular homes, another attraction is that many of the subdivisions offer special facilities such as those offered in site-built residential communities with home owners associations. There are often common areas that include recreation facilities, swimming pools, a clubhouse or even golf courses. Because they are a fully platted subdivision, they are replete with curbs, gutters and paved roads.
There are Differences between Manufactured Homes, Mobile Homes and Modular Homes.
- A manufactured home is built entirely in the factory. This type of home is traditionally less expensive than a site built or a modular home and includes transport to the site and installation (ground setting). Manufactured homes used to be called mobile homes or trailers but today’s manufactured homes don’t resemble the old mobiles of the past. They are still built on a non-removable steel chassis and are transported to the site on their own wheels. A double-wide or multi-sectioned home is joined together once it reaches the property on which it will be set. A manufactured home may or may not be placed on a permanent foundation but inspectors must approve any work at the site just as they would a stick built home. Most traditional subdivisions do not allow manufactured homes.
- A mobile home is a term used for manufactured homes built prior to June 15, 1976 when the HUD code went into effect (sometimes called a “Pre-HUD Mobile”).
- A modular home is divided into multiple modules or sections which are manufactured in a remote facility, meeting state or local codes where the home will be located, and then delivered to their intended site of use for assembly. The sections are transported to the building site on trucks where local contractors take over and join the sections together, “building” the home. Local inspectors must approve all work and ensure it is up to code. Modular homes are generally less expensive than site-built stick homes but not always. Once built, they tend to last as long and appreciate in value much the same as a standard site built home. The term modular home is sometimes confused with a manufactured home and they may be restricted from regular residential subdivision zoning.
Financing for the buyer of a manufactured home is usually a conventional home mortgage. The home is financed and purchased as real property with the home and land financed together. The title to the home is surrendered to the local Department of Motor Vehicles and an affidavit is recorded, thereby “affixing” it to the land. The home becomes real property instead of personal property and will be taxed accordingly. Lending institutions recognize that the construction loan draw process for a modular home is dramatically shorter due to the shorter construction cycle and reduced inspections, making construction loans typically less costly.
As in any other real estate purchase, buyers should always do their due diligence before making the decision to purchase in a manufactured or modular home subdivision so they fully understand the costs and fees involved, what services may or may not be available and exactly what restrictions on the land may be in place.